Cable dismisses "bonkers" unfair dismissal plans

Coalition tension over the Beecroft report continues.

The coalition tensions over proposals for “no fault dismissal” are still rumbling on, with the Business Secretary Vince Cable vowing to fight the “bonkers” plans by venture capitalist and Conservative donor Adrian Beecroft.

The Beecroft proposals were first floated back in October. The businessman was commissioned by Downing Street to look at ways of increasing productivity and efficiency for small businesses. One suggestion was to scrap unfair dismissal rules, which he said were having a “terrible impact” on the “efficiency and hence competitiveness of our businesses”.

The full report is set to be published this week, but has already been leaked to the Daily Telegraph. Proposals include stopping the planned spread of flexible working, and scrapping planned equal pay audits.

Despite the fact that the report has not yet been officially made public, it has been the subject of intense Whitehall negotiations for months. Back in November, my colleague Rafael Behr reported:

Cable has agreed to "look at the evidence". Some Tories are suspicious that this is a Lib Dem ruse to kick Beecroft into the long grass. David Cameron is known to have a short attention span and the suspicion is that, once the Autumn Statement on the economy is out of the way and some other big events have come along to distract the prime minister - as is inevitable - the fire-at-will idea can be quietly shelved. This, some Tories mutter, is a classic Lib Dem tactic in the coalition.

However, seven months later, it has not panned out as the Liberal Democrats hoped, with Cameron saying he will examine the idea of no fault dismissal. “I am interested in anything that makes it easier for one person to say to another person: ‘Come and work for me’. We need to examine every proposal,” he said in Chicago this weekend.

Cable is said to be surprised that Cameron is not distancing himself, given that Beecroft is a major Tory donor and there have been rumblings over cash buying influence. The Business Secretary has said that the proposals have no evidential base.

Yet many Tory MPs support the Beecroft proposals, as a radical way of injecting growth into the economy. Floundering on the economy and keen to shore up support within his own party, it makes sense that Cameron is listening – but it is a balancing act, as pushing through such controversial measures would cement the "nasty party" image that the Prime Minister has done so much to work against. As Liberal Democrat opposition galvanises, it remains to be seen who will be victorious in the Battle of Beecroft.